Development ministry fraud ring busted

The ring was active in the Development ministry and is accused of defrauding the state of almost 20 million euros.

The scam was discovered by deputy Development minister Notis Mitarakis, who turned the case over to the ministry's investigative services, while the primary mention of the case by the minister was last December, when he sent all evidence he had to the financial prosecutor.

According to primary reports, the ring used fake letters of credit worth 30 million euros for investments worth 70 million euros, in order to get financing worth 18 million euros. The case file, about 40,000 pages long, involves six Greek companies, three of which were manufacturing and providing the fake letters during the past three years.

The way it worked was that these “investment” companies were depositing fake letters of credit worth up to two million euros to the ministry, or other public sector operators such as municipalities, regencies, hospitals etc. and secured many millions worth of financing for various development programs. What happened with the financing is so far anybody's guess.

The investigation is in full spin, with the authorities looking into all aspects of the case.